5 Top Leisure Stocks To Watch In May 2022
With summer fast approaching, leisure and entertainment would likely be on the minds of many, including stock market investors. As the pandemic faded after nearly 2 years, traditional leisure options have been coming back with a vengeance. Nevertheless, it is noteworthy that indoor entertainment options popular during the pandemic could still stick around to some extent as new habits form. Streaming companies such as Netflix (NASDAQ: NFLX) and many others grew to unprecedented levels as indoor entertainments were the go-to choice for many people.
Fast forward to today, the streaming industry is still growing as reflected by Warner Bros’ (NASDAQ: WBD) HBO and HBO Max that now has 76.8 million subscribers. Despite the steep competition within the industry, its subscribers still grew by 3 million from the last quarter and 12.8 million year-over-year. Elsewhere, the mountain resort operator, Vail Resorts (NYSE: MTN) also recently announced its biggest hospitality sale of the summer season. Guests will have a limited-time opportunity to save 15% on lodging rates. To conclude, leisure is a sector that will always have a strong demand. Thus, here are some of the top leisure stocks to watch in the stock market today.
Leisure Stocks To Buy [Or Sell] In May 2022
- SeaWorld Entertainment Inc (NYSE: SEAS)
- Penn National Gaming, Inc (NASDAQ: PENN)
- Royal Caribbean Cruises Ltd (NYSE: RCL)
- Marriott International Inc (NASDAQ: MAR)
- Vista Outdoor Inc (NYSE: VSTO)
SeaWorld
Firstly, we have the theme park and entertainment company, SeaWorld. Known for its brands that include SeaWorld, Busch Gardens, Aquatica, Sea Rescue, and Sesame Place, the company boasts a diversified portfolio of 12 differentiated theme parks in the U.S. As the name suggests, many of the company’s theme parks showcase its zoological collection while delivering a diverse array of thrill and family-friendly rides. SEAS stock has climbed more than 16% over the past year.
This past week, SeaWorld announced its first-quarter financial highlights. The company’s total revenue was a record $270.7 million, up 57.5% year-over-year. When compared to the first quarter of 2019, it still grew by 22.7% pre-pandemic. Meanwhile, guest attendance was 3.4 million, an increase of 1.2 million guests or 53.7% from the first quarter of 2021. Across the board, the company is showing signs of recovery that may spark the interest of investors. With that in mind, would you consider adding SEAS stock to your portfolio?
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Penn National Gaming
Penn National Gaming caters to a younger generation of leisure and entertainment crowds. Essentially, it owns and manages gaming and racing properties and operates video gaming terminals. Besides that, the company also offers casino gaming, online gaming, and sports betting which has been rising in popularity over the years. With approximately 44 gaming and racing properties within North America, Penn National Gaming is a household name in the leisure industry right now.
On the financial end, the company has also been making meaningful strides. During its first quarter, the company’s revenue improved to $1.56 billion, representing an increase of 22.7% year-over-year. Also, it posted an adjusted EBITDAR of $494.7 million, up 10.7% compared to the same period last year. These results are a testament to its continued progress in meeting the company’s strategic objectives. In light of this, Penn announced that it will be raising its 2022 revenue and EBITDAR guidance range to $6.15 billion to $6.55 billion and $1.875 billion to $2.00 billion, respectively. So, would this be sufficient to sway the sentiment around PENN stock in the right direction?
Royal Caribbean
Following that, let us look at the cruise company, Royal Caribbean. The company owns and operates three global cruise vacation brands, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. Royal Caribbean offers to handle virtually all travel aspects related to guest reservation and transportation. This includes arranging guest pre and post hotel stay and even air transportation. However, It is no secret that the coronavirus pandemic had detrimental effects on the cruise industry. Fortunately, it appears that the company is starting to regain its foothold again.
Despite a first-quarter operating loss of $1.2 billion, there are plenty of positives that suggest a smoother journey ahead for the cruise operator. By the end of the quarter, almost 90% of its worldwide fleet had returned to operations across its five brands. Moreover, the company carried approximately 800,000 guests and achieved record guest satisfaction scores. All in all, the company is now confident that 2022 will be a strong transitional year as it returns to full operations. Considering these factors, could RCL stock be a viable investment option now?
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Marriott
Similar to most leisure companies, Marriott suffered a huge setback when the pandemic first hit. That said, the company appears to have successfully pushed to greater heights as the pandemic fades. The company owns Classic Luxury hotel brands that would be no stranger to most. They comprise brands such as JW Marriott, The Ritz-Carlton, and St. Regis. In fact, Marriott reached an admirable milestone in April as it launched The Westin London City. This marks the 1000th hotel in Europe, the Middle East, and Africa. Within the next two years, the company also expects to add more than 200 properties within these regions.
On top of that, the company just came off a strong financial quarter earlier this past week. Marriott opened the fiscal year 2022 with an operating income of $558 million, skyrocketing by 564% year-over-year. Meanwhile, its net income was $377 million, turning positive from a reported loss of $11 million in the same period last year. Investors should also note that Marriott will now resume cash dividends of $0.30 per share. Given these exciting developments, is MAR stock a top leisure stock to buy?
Vista Outdoor
Last but not least, let us look at Vista Outdoor. In detail, this is a leading global designer and manufacturer of outdoor recreation and shooting sports products. It serves a diverse range of consumers around the globe, including outdoor enthusiasts, golfers, hunters, athletes, and military professionals. Safe to say, the rising consumer demand across its brand as the pandemic eases has gained the attention of many investors. Over the past week, VSTO stock surged by more than 10%.
Similar to the other entries, Vista also recently announced an encouraging financial update that contributed to its recent momentum. The company closed its fiscal year 2022 with a record sales of $809 million for its fourth quarter. This represents an increase of 36% year-over-year, driven by strong demand in its Sporting products and Outdoor Products segment. Additionally, its diluted earnings per share soared to $1.93, compared to $1.11 in the prior-year quarter. All things considered, do you think VSTO stock will have more room to grow?
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